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Wage Growth Likely to Pick Up, BNA Index Predicts

Arlington, Va. (Aug. 17, 2010) — The pace of wage growth in the private sector likely will pick up in the coming months from recent historic lows, according to the preliminary third quarter Wage Trend Indicator™ (WTI) released today by BNA, a leading publisher of specialized news and information.

The index rose to 96.97 (second quarter 1976 = 100) from 96.85 in the second quarter. If confirmed by the revised and final third quarter readings, the gain would be the WTI’s first in more than two years.

“The increase in the latest WTI is pointing to an improvement in labor market conditions — albeit a small one,” said economist Kathryn Kobe, a consultant to BNA on the WTI. “The rate of wage increases should show a turnaround in the coming months, but I think it's going to be a slow change in that direction,” Kobe said.

In the coming months, the annual rate of wage growth in the private sector is expected to equal or exceed the 1.6 percent posted over the 12 months ended in June, as measured by the Department of Labor. That was near the record low of 1.4 percent in 2009.

Reflecting mixed economic conditions, three of the WTI’s seven components made positive contributions to the preliminary third quarter reading, while two factors were negative and two were neutral.

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